Two trades to watch: GBP/USD, Dax
Fiona Cincotta August 20, 2021 2:36 AM
GBP/USD extends losses as retail sales unexpectedly slump. Dax trades under pressure finds support at 50 sma.
GBP/USD trades at monthly low as retail sales unexpectedly slump
GBP/USD licking its wounds after the biggest daily fall since June as COVID cases rise and AstraZeneca & Pfizer vaccines are found to be less effective versus delta strain.
UK retail sales unexpectedly slumped in July to -2.4% MoM versus 0.3% gain forecast. Sales declined as covid cases & Pingdom kept people at home.
UK consumer confidence ticked lower in August to -8, from -7 the post pandemic high.
US Dollar steady after reaching yearly highs on safe haven inflows & hawkish FOMC minutes earlier in the week.
Where next for GBP/USD?
GBP/USD fell below its 200 sma on the daily chart and broke through a key support at 1.3660 keeping the seller’s hopeful. The RSI is pointing lower and in negative territory supportive further downside.
A breakthrough support at 1.3570 could see the pair reach fresh year to date lows.
On the flip side any move higher would need to retake horizontal resistance at 1.3660 and 1.3700 before looking to retake the 200 sma at 1.3795.
DAX under pressure, finds support at 50 sma
German Dax is heading lower as European indices trade in a mixed fashion at the end of the week, a week which has seen investors turn more risk adverse.
Rising covid cases, concerns over global growth and China’s regulatory crackdown have weighed on demand for riskier assets.
Germany’s factory prices soared 1.9% MoM in July, up 10.4% YoY – an elevated level which could well attract the attention of the ECB.
Where next for the Dax?
After hitting an all time high at 16031 last week, the index has been trending lower. It found support yesterday on the 50 sma on the daily chart which is keeping the bulls hopeful. However, a bearish crossover on the MACD suggests that there could be more downside the come.
Any move lower would need to close below the 50 sma at 15655 in order to head towards the 100 sma 15500. It would take a move below 15245 to negate the near term up trend and see the sellers gain traction.
On the flip side, should the 50 sma continue to hold bulls would look for a break above 16031 to reach fresh all-time highs.
How to trade with FOREX.com
Follow these easy steps to start trading with FOREX.com today:
- Open a Forex.com account, or log-in if you’re already a customer.
- Search for the market you want to trade in our award-winning platform.
- Choose your position and size, and your stop and limit levels.
- Place the trade.
Disclaimer: The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.
Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex and commodity futures, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to Forex.com or GAIN Capital refer to GAIN Capital Holdings Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.